Tesla Is Down 60% but May Be Nearing Some Support

Tesla stock may be nearing support as selling pressure mounts. Let's look at the charts for TSLA stock.
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Tesla  (TSLA) - Get Report shares had been holding up relatively well to the coronavirus-induced market selloff - at least considering where they'd come from less than a year ago.

In mid-2019, the Palo Alto, Calif., electric-vehicle maker's shares were trading for less than $200 before a capital raise boosted optimism. It ended up triggering a massive short squeeze, with Tesla rallying to a high of almost $970 in January.

Before the prior five trading sessions occurred, the shares were holding up north of $600.

While that's down about 30% from the highs, many would consider this pretty darn good considering the automaker recently raised more funds and saw a more than fivefold increase in its stock price in less than eight months.

But concerns are compounding now. 

Not only will auto sales take a hit, Tesla is in an argument with Alameda County, Calif., authorities that it shouldn’t shut down despite the county’s shelter-in-place order. 

Shuttering its only plant in North America would be an obvious problem for Tesla, while others like Ford  (F) - Get Report and General Motors  (GM) - Get Report have tried to avoid the same fate despite pressure from the UAW.

The latest news and recent market volatility have finally cracked Tesla stock, as the shares tumbled through $600 support. Let’s look at the charts.

Trading Tesla Stock

Weekly chart of Tesla stock.

Weekly chart of Tesla stock.

Tesla stock at last check was trading around $355, down about 60% from those highs, erasing any hope among the bulls that the company may display relative strength in the current market environment. 

While Tesla has not been shy about raising cash, it’s not known for having the strongest balance sheet. Unfortunately, those types of stocks are getting hit hard.

Shares of Tesla did bounce off the 100-day moving average last week, but that level of support lasted only a day. In fact, the rebound from this mark sent the shares to $600 - former support that then acted as resistance.

That was just a few days ago, and we’ve quickly seen the shares fall more than $200 from that mark. If the selling pressure accelerates from here, $300 is not out of the question.

That’s even as Tesla shares come into a bevy of weekly moving averages between $305 and $345, as well as uptrend support (blue line). 

Bulls want to see TSLA shares reclaim the $380 mark, which is multiyear range resistance. Above that and $400-plus is possible.

But there’s nothing stopping Tesla stock from falling into the $300 to $350 range. Below it and $250 is on the table as well. Anything is possible in this market, and given that, Tesla may simply prove too risky for most investors.